Microsoft has settled its differences with Barnes & Noble by taking a 17.6% stake in a new subsidiary that may provide it with an ARM tablet on which to run Windows 8.

The NOOK is Barnes & Noble's eReader and was the focus of a lawsuit in which Microsoft accused Barnes & Noble of infringing its patents. This is now settled as part of Microsoft's $300millon investment in the new subsidiary, which will bring together the digital and college-textbook elements of Barnes & Noble.

Another outcome is that a NOOK application will be included in Windows 8. For Barnes & Noble the benefit is clear. Chief Executive William Lynch commented:

"Microsoft's investment in Newco [the new digital and college unit], and our exciting collaboration to bring world-class digital reading technologies and content to the Windows platform and its hundreds of millions of users, will allow us to significantly expand the business."

For Microsoft, is the intended prize to be a tablet on which to run Windows RT, previously Windows on Arm or WOA? This is something we can only speculate about. All Microsoft’s Andy Lees has said is neither company would be talking product roadmaps today, and he pointed out that Microsoft has not done a teardown on the NOOK devices to see where they are in terms of Windows 8 requirements.

He commented

"Our complementary assets will accelerate e-reading innovation across a broad range of Windows devices, enabling people to not just read stories, but to be part of them."

Recent statistics have indicated that Amazon's Fire eReader/tablet is the most popular Android device so a Window RT eReader would make a great deal of sense and provide a welcome boost for the new OS.

This could be a good move for Microsoft or a terrible move for the NOOK depending on how things turn out.